Aging into Medicare: Your deductibles, expenses and options

Becoming eligible for Medicare can be a great thing for thousands of New Mexicans. Medicare helps many Americans afford high quality health care. It is important, however, to know what expenses you’ll have as a Medicare recipient. We are continuing in our monthly series about what it means to age into Medicare and what Medicare means for you. This month, we will tell you more about the expenses associated with Medicare, so that you know what you can to expect to pay for your health care.

What are my expenses?

While most people do not have to pay for Part A (hospital insurance), everyone who chooses Part B (medical insurance) must pay for it. Additionally, both Parts A and B have deductibles that must be paid before Medicare will begin picking up expenses. Many Medicare Advantage Plans, such as Lovelace Medicare Plan, cover many of the costs associated with health care. Here is a breakdown of those amounts for 2012:

Original Medicare Deductibles and Coinsurance

• $140 Part B deductible• $1,156 deductible per benefit period; $0 for the first 60 days of each benefit period• $289 per day for days 61 – 90 of a hospital stay each benefit period • $578 per day for days 91 – 150 of a hospital stay each benefit period

All costs for each day of a hospital stay over 150 days

• $144.50 per day for days 21–100 of a skilled nursing facility stay each benefit period• All costs for each day of a skilled nursing facility stay after day 100 in a benefit period• 20% for doctor services, outpatient therapy, and durable medical equipmentIf you are entitled to Social Security retirement, you are automatically enrolled in Medicare Part A (hospital insurance), which is premium-free, and Medicare Part B (medical insurance), which you pay for.

You will be automatically enrolled in Medicare Part B and must decide if you want to keep it. Medicare Part B will cost you $99.90* per month which is taken from your Social Security check. This premium goes to the federal government for the administration of the Medicare program. If you do not want Part B you must sign the back of the Medicare card which has been sent to you (“I don’t want Medical Insurance”) and return in the enclosed envelope before the effective date on the card (this will be the first of the month in which you turn 65).

*For those enrolling in Part B for the first time in 2012; may be affected by income or Medicaid status.

You may not need Medicare Part B yet if:

• You are age 65 or older and you or your spouse are working and you are covered by an employer or union group health plan based on that current employment, or • You are under age 65 and disabled and you or any members of your family are working and you are covered by an employer or union group health plan based on that current employment.

In the future, you can sign up for Part B during the annual General Enrollment Period (Jan. 1 through March 31).

If you don’t have Part B you will not be eligible to join any Medicare Advantage plan. If you choose to enroll in Part B at a later date there is a penalty imposed unless you are covered in one of the situations above.

As of Jan. 1, 2006, Medicare offers prescription drug coverage to Medicare beneficiaries. This is referred to as Part D. Part D is available to you through private companies in two forms: A Medicare Advantage Prescription Drug Plan, which provides both your medical and prescription drug coverage; or a standalone Prescription Drug Plan (PDP), which provides only prescription drug coverage. With a standalone PDP you would typically be on original Medicare for your medical services.

Marlene Baca is Lovelace Health Plan’s Chief Programs Officer. “Aging into Medicare” is a monthly series on Medicare topics. She is happy to take questions for future columns. Email Raschel.brennan@lovelace.com.